Dotcom's lawyers say prosecution threatens Internet freedom

Lawyers for Megaupload founder Kim Dotcom accused the US government Wednesday of launching a flawed prosecution against their client with "frightening" implications for all Internet users.

The New Zealand-based Internet tycoon's legal team released a "white paper" to coincide with a visit to Auckland by US Attorney General Eric Holder, which argues that online piracy allegations against Dotcom are baseless.

The 38-page document says that while copyright issues were normally treated as a civil matter, US prosecutors were trying to use anti-racketeering criminal statutes normally used against gangsters to press their case.

"The US actions against Kim Dotcom set a frightening precedent for the basic rights of Internet users and innovators of new technologies," it said.

"Frankly, the lies that were told to friendly governments and the illegal spying on Kim Dotcom demonstrate a gunslinger attitude to rule of law."

Dotcom, a German national with New Zealand residency, was arrested in an armed raid on his Auckland mansion in January last year and his Megaupload empire was shut down.

US authorities allege Megaupload and related file-sharing sites netted more than US$175 million and cost copyright owners more than US$500 million by offering pirated copies of movies, TV shows and other content.

The US Justice Department and FBI hope to extradite him to face charges of racketeering fraud, money laundering and copyright theft in a US court, which could see him jailed for up to 20 years if convicted.

One of the white paper's co-authors, London-based human rights lawyer Robert Amsterdam, said Washington had bowed to pressure from the film industry to pursue Dotcom because it was a major contributor to Democratic Party coffers.

He said copyright holders had failed to adapt to new technology and wanted to make an example of innovators such as Dotcom, a pioneer in "cloud" computing, to protect their interests.

"These are the guys who opposed the record player, the photocopier, the Sony Betamax," he told AFP in a telephone interview.

"The copyright lobby has to be controlled."

Amsterdam said that even though Dotcom was living in New Zealand and the majority of his business was outside America, US prosecutors seized his multi-million dollar business without giving him a hearing.

Dotcom, a larger-than-life character known for his luxurious lifestyle, said he was singled out as prosecutors believed he was unlikely to garner public sympathy when he was arrested.

"I am an easy target. They needed a villain who's rich, flamboyant and over the top like me," he said in a live chat Wednesday on the New Zealand Herald website.

Amsterdam said there was nothing to stop the United States taking similar criminal action against ordinary Internet users if it continued to act as "the international bully" on copyright control.

"It's that important for freedom of expression," he said. "There are no guarantees if they get away with this."

During his trip, Holder is expected to hold discussions with New Zealand authorities on the Dotcom case, which is the subject of numerous legal challenges and appeals in the South Pacific country's courts.

Dotcom is free on bail in New Zealand ahead of an extradition hearing in August and has started a new file-sharing venture called Mega.

He said he was not confident about receiving a fair trial in the United States but did not allow the prospect of extradition to weigh on his mind.

"I am innocent. I have done nothing wrong," he said. "I sleep good at night and I know that everything will be OK in the end."